subject: Quick Notes On Mortgage Loan Modification [print this page] Quick Notes On Mortgage Loan Modification
It is common these days to for people to have problems in paying their housing loans. Do you fear you might be about to lose your home to your bank or loan provider? Before you stress yourself out thinking about this possibility, consider mortgage loan modification. This is just basically a program designed to modify your loan to fit your financial status. All it takes is for you to get yourself familiar with the system and then you start making it work for you.
What is a mortgage loan modification anyway? What does it do? In other words, the application will just adjust your loan and make it more affordable for you. You just need to modify your loan rather than re-loaning. Doing this will make things more convenient for the loan provider and you, of course.
But who are qualified for this program? Loans that were applied before January 1, 2010 are qualified for this program. In mortgage loan modification, there are two classifications of eligibility.. One is for people with updated mortgage payments and the other is for those who have missed payments but have paid at least 31% of their total mortgage.
The government of course wil be in the middle since it's a mortgage loan modification. It subsidizes the cost resulting from the drop in payments from the regular 38% to the discounted rate of 31% based on the modification program. Basically, there are a few options for a loan to be modified to fit the mortgagee's financial capacity. The interest rate on the loan may be reduced, the terms of payment may be extended up to forty years, the mortgagee may be offered another type of loan or a combination of any of these three may be applied possibilities. Aside from this subsidy, the government is also actively pursuing a campaign that motivates banks and other loan providers to participate in the program.
However, there's a difference between a loan modification agreement and a forbearance agreement. The temporary solution offered to mortgagees who are experiencing financial problems that will soon be over is called loan modification agreement while the program for those who are unable to pay an existing loan is the forbearance agreement.
